Tag Archives: economics

Desperation

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With his legacy mostly erased, and more of it on the way after the current temporary interruption—an outcome ex-President Barack Obama (D) will thank us for in the fullness of time and his clearer understanding—Obama is desperate to preserve such of it as he can with his revisionist history.

Former President Barack Obama on Tuesday took credit for the boom in US oil and gas production, saying, “That was me, people.”

Of course, it was.  His sequestration of Federal lands and offshore fields from oil and gas exploration with his slow-walking of the necessary permits were instrumental in triggering the boom.

You wouldn’t always know it, but it went up every year I was president. That whole—suddenly America’s like the biggest oil producer and the biggest gas….

Never mind that those year-on-year increases—small as they were—were driven by exploration and exploitation of those fields on private and other non-Federal lands.  The increases didn’t get serious until Obama and his administration were out of the way, but we’ll not mention that.

Another bit of history that the revisionist Obama carefully elided was provided by ex-Shell Oil Company President John Hofmeister:

…he tried to remake the power generation industry without involving Congress, and the Paris accords—again without involving Congress.

That remake was his threat—which he tried most enthusiastically to carry out—to eliminate our carbon-based (mostly coal, but oil and gas, also) electricity production industry, along with the wholesale destruction to our overall economy that acting on his Paris Accord would have wreaked.

The extent of Obama’s desperation is sad.

Paying for Groceries

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A farm bill is wending its way through Congress, finally, as the House and Senate have agreed to a common version.  What’s in this version?  Good question.

Lawmakers for months have been deeply divided over the farm bill, which funds crop insurance and farm subsidies, as well as programs to help low-income people pay for groceries.

But these…lawmakers…won’t talk publicly about the details of their compromise.

There are a couple of things here, though, that are clear despite the lack of transparency.  One is the inconsistency of having farm price supports—farm subsidies—along with funding programs to help the poor pay for that artificially costly food.  The other is the premise that Government belongs in the insurance business.  One would have thought Obamacare would have driven home the utter foolishness of that, even as it concerns such long-standing involvements like crop insurance.  Silly me.

No.  It’s long past high time for price supports to be eliminated and to let competition drive food prices to their naturally lower levels.  It’s also long past high time to get Government out of the crop insurance business (all insurance business, come to that), and let free market-competing private enterprises sell the relevant policies—and relieve tax payers of the burden.

As for the poor who still wouldn’t be able to afford those free market lower prices, the Senate-passed version that went to House-Senate committee (and about which outcome we’re told nothing) had no work requirement as a criterion for eligibility for welfare support/food stamps: the Progressive-Democrats won’t hear of any requirement to take steps to earn one’s way off welfare.  That work requirement needs to be a part of the bill that goes to the President for signing; those folks should have the opportunity to escape the Progressive-Democrats’ welfare cage.

“We Need to Decide”

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So says President Xi Jinping of the People’s Republic of China.

Speaking in Spain while enroute to the G-20 conference in Argentina, Xi said

I think we are at a crossroads. In economic terms we need to decide if we are going to follow the economic globalization and free market or if we are going to choose unilateralism and protectionism.

“Crossroads” may be a bit much.  Certainly, we’re at cross purposes on international trade matters, but I think “crossroads” overstates the case.  The current budding crisis will fade before it breaks, or we’ll recover after it breaks.  In either case, the situation is not at all irrecoverable.  Irrecoverability was a serious risk in WWII.  Irrecoverability was a serious risk during the global depression of the 1930s due to all the government interventions—interferences—into their domestic economies, which badly slowed those recoveries.  We’re not near that today.

The larger question, though, is the falseness of Xi’s remark about globalization vs unilateralism, free market vs protectionism.

We do need to follow free market tenets along with free trade principles and the degree of globalization that will ensue from those freedoms.  It would be good if the PRC followed those tenets and principles, too.  Instead, Xi’s government engages in theft of proprietary material, theft of intellectual property, extortion of those things as a price of doing business inside the PRC.  It requires government backdoors into the software used by companies doing business inside the PRC.

Xi’s government sets trade barriers including requirements to take on a PRC company as equal or majority partner as a condition of doing business inside the PRC (Xi talks of waiving that requirement in a couple of cases; neither of those waivers actually have occurred), heavily subsidizes domestic businesses, blocks economically useful mergers between international companies headquartered in other nations—other continents—for noneconomic reasons, routinely intervenes in its domestic stock “markets,” manipulating its currency value, and on and on.

Xi’s government tried to abuse its monopoly power in rare earth elements by limiting its exports to other nations below economic, free market demand levels.  Its occupation of the South China Sea and the islands—owned by other nations—is for the purpose of controlling the resources on/below the sea bed and the food supplies in the waters.

Xi’s government exports substandard—even dangerous—products like poisoned pet food, plywood sheets laced with formaldehyde, baby formula spiked with melamine powder.  The list goes on.

It would be good if the PRC did join the consensus for free and open trade.  To do that, though, the PRC would have to move away from its current business model, a model of theft and coercion rather than a model of honest markets and freely done international trade.

Foreign Aid to Whom?

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The United Nations’ Central Emergency Response Fund has, with Venezuelan President Nicolas Madura’s permission (recipient nations’ permissions are required for CERF funds release), sent $9.2 million in emergency humanitarian aid to…someone…in Venezuela.  The money is intended to mitigate Venezuela’s medicine and food shortage crisis which stems from the Venezuelan government’s failure to perform.

In addition, the UN’s International Children’s Emergency Fund (UNICEF) is expanding its aid for Venezuela.  UNICEF already has delivered…to someone…nearly 130 tons of medicine, health, and nutrition supplies for 350,000 women and children just since August.

The UN has not said to whom it sent these goodies, only for whom they’re intended.

Russia and Ukraine

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Over the weekend, Russia has decided to block Ukraine’s access to the Sea of Azov from the Black Sea; it’s placed a cargo ship under the Kerch Strait Bridge, which Russia completed earlier this year to give it direct land access from Russia to Russian-occupied Crimea, and Russia has military helicopters orbiting above the bridge.  The Kerch Strait is a bit under 2,000 feet wide where the bridge sits.

This followed the Russian Black Sea Navy’s aggression against a Ukrainian flotilla of no military significance—a Ukrainian Navy tugboat and two Ukrainian Navy artillery ships—that was transferring from Odessa on the Ukrainian Black Sea coast to Mariupol on the Ukrainian Sea of Azov coast. The Russian ships deliberately rammed the Ukrainian tugboat, damaging the latter’s hull and engines, and then the Russians seized the three Ukrainian ships.

The question arises concerning why Russian President Vladimir Putin has chosen this naked escalation.  A number of possible answers arise, also.

One is to serve as a military demonstration of force for Ukraine’s benefit, executed to enforce Russia’s illegal “elections” in its eastern occupied Ukraine.

Another is to distract from his doings in the north: his meddling in Baltic State elections, his cyber aggressions against them, his movement of tactical nuclear weapons closer to his borders with them.

Another is to distract from renewed troubles with his second natural gas pipeline, currently under construction, that would connect Russia with Germany under the Baltic Sea.

Another is for the aggression against Ukraine to serve as a demonstration for the attention of Germany regarding that pipeline and for the attention of Moldova as the latter works to tighten its ties with NATO Europe and to resist Russia’s attempt at Ukraine-style occupation.

Another is as a domestic distraction.  Russia also is currently is deeply into a demographic crisis.   Nearly 30% of the Russian population is 55 years old or older, and that per centage is growing.  Russia’s current fertility rate—births per woman—is 1.61 against a necessary 2.01 rate just to maintain a given population level.  Russia’s current birth rate of 10.7 births/1,000 population compares badly with its current death rate of 13.4 deaths/1,000 population.  With an in-migration rate of 1.7 migrant(s)/1,000 population, that still leaves Russians dying faster than they’re being born and gaining immigrants combined.  Consistent with that, Russia’s population is shrinking—by 0.11% this year.

Russia’s per capita GDP has fallen by 3% since its nearby peak in 2013: Russians are individually poorer than they were, even with a slight increase in the current year, even as Putin spends Russian treasure on all of his foreign adventures.  Note that this shrinkage in individual prosperity is mitigated by that shrinking population—were it growing, instead, the increasing poverty would be much worse.

Or some combination of all of those distractions.

Note, though, that as of Monday, Russia seems to have lifted its Sea of Azov blockade, but it continues to hold the Ukrainian ships and crews.